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Syngenta Reports Lower Quarterly Earnings
USAgNet - 07/27/2017

Syngenta underlined the difficulties facing agrichemicals groups in South American market as it unveiled a 4.2% drop in quarterly sales, in its first results statement since being bought by ChemChina.

Swiss-based Syngenta, which was bought by ChemChina last month for $43bn, revealed sales of $3.21bn for the April-to-June period, down from $3.35bn a year before, accelerating the pace of deterioration from the 0.9% seen in the previous quarter.

According to AgriMoney.com, the group noted "cold weather and low disease pressure" which curtailed sales in its European, African and Middle Eastern division, although it added that "the impact of these conditions on crop protection volumes was partially offset by the successful launches of Solatenol," a fungicide, in Europe.

In Asia, sales dropped 5.2% to $455m, undermined by "dry conditions in Australia", where spreading drought is raising concerns of a sub-20m-tonne wheat crop, besides by a chance of sales taxes in India which is seen as incentivising a switch in trade to the current quarter.

However, the steepest drop in sales was in Latin America, where sales for the April-to-June quarter, at $482m, slumped by 25% year on year, undermined by a drop in farmer spending on agrichemicals, in the face of weaker crop prices, which has caught out peers too.

The comments come less than a month after rival Bayer warned of a E300m-400m earnings hit from measures to curtail its own agrichemical stocks in Brazil, warning of an "unexpectedly high channel inventory level of crop protection products".

The shake-up is seeing Bayer, for instance, renegotiate a contract with crop enhancement group Plant Impact over supplies of a spray aimed at boosting soybean yields.


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